Lorenzana: ‘Nothing wrong’ with deal between China-backed telco and military

JC Gotinga
Lorenzana: ‘Nothing wrong’ with deal between China-backed telco and military


The defense chief says he 'most probably will sign' the agreement between the military and Dito Telecommunity, but holds off while the Senate reviews its security implications

MANILA, Philippines – He has yet to sign it, but Defense Secretary Delfin Lorenzana said on Thursday, October 17, that he did not have a problem with an agreement that would allow the China-backed Dito Telecommunity to build facilities on Philippine military installations.

“Nothing wrong, just the same as Globe and Smart,” Lorenzana told reporters when asked about his review of the memorandum of agreement between Dito, formerly Mislatel, and the Armed Forces of the Philippines (AFP).

“I most probably will sign it,” he added.

Lorenzana was on official business abroad when the AFP and Dito signed the deal on September 11. He then said he would review the contract after it drew strong opposition from experts and several lawmakers who warned it could leave the military vulnerable to spying by the Chinese government.

As defense chief, Lorenzana could reject the deal despite it having been approved by the military. However, he has been holding off his decision because the Senate on September 30 asked if it could also review the deal’s security implications.

Opposition senators wanted to compare the details of the agreements, as the military said the arrangement with Dito is similar to its existing ones with Globe Telecom and Smart Communications.

Copies of the AFP’s “co-location” agreements with Dito, Globe, and Smart had been with the Senate for two and a half weeks but he had yet to hear back from the senators, Lorenzana said on Thursday.

The country’s first two telcos have set up telecommunication equipment on towers inside military reservations for security. Meanwhile, the military benefits from the arrangement through an exchange of equipment and services equivalent to the rental value of the shared facilities, according to the military.

Controlled by China

However, the problem with Dito is its direct link to the Chinese government, lawmakers and experts argued. Dito, a consortium led by Davao City businessman Dennis Uy, includes China Telecom, which is owned and controlled by the Chinese government.

China’s laws mandate its companies to provide intelligence to the government.

China Telecom has a 40% stake in Dito. Although it is a minority stake, it still affords the Chinese company full access to its daily operations, especially because it will provide the technology and infrastructure for the up and coming telco, Senate Minority Leader Franklin Drilon told Lorenzana on September 30.

Despite this, Lorenzana and other security officials have downplayed Dito’s Chinese connection, saying Dito’s infrastructure would be “separate” from the military’s even though they would be occupying the same towers within military properties.

Although the AFP initially said Dito would be allowed to put its facilities “in military camps and installations,” it later on said the deal did not necessarily include camps but mere reservations and towers atop hills and mountains across the country.

Lorenzana himself said he was worried that the numerous Chinese workers in Philippine offshore gaming operation hubs near military camps could easily turn into spies.

He also reported and protested a series of incursions by Chinese naval and militia vessels in Philippine waters earlier this year, and called out China’s “bullying” of Filipinos at Panatag (Scarborough) Shoal off Zambales.

But he insisted there is nothing suspicious about the military’s deal with Dito. – Rappler.com

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JC Gotinga

JC Gotinga often reports about the West Philippine Sea, the communist insurgency, and terrorism as he covers national defense and security for Rappler. He enjoys telling stories about his hometown, Pasig City. JC has worked with Al Jazeera, CNN Philippines, News5, and CBN Asia.